As Ted Kaufman writes for The Huffington Post, the record-setting volatility in U.S. stock markets over the past two weeks is a clear distress signal. Our historically free, fair and credible markets are in danger of losing the support of individual American investors and investors from the rest of the world. With the advent of new technologies and regulatory improvements in the markets of other countries, investors of all kinds are questioning just how fair and transparent U.S. markets really are, and are actively exploring their alternatives.
Although this recent market roller coaster has been largely attributed to Washington’s partisan gridlock, the truth is not that simple. Several adverse developments in recent years have created critical imbalances in our stock markets. First among them is the explosion of unregulated High Frequency Trading (HFT).